Justification for Other Than Full and Open Competition

This is a Justification & Approval (J&A) document for a sole-source contract award by the Defense Logistics Agency (DLA) Energy for thermal remediation services at DFSP San Pedro, California.

Contract Overview and Background: The document justifies a sole-source award to Source Group, Inc. (SGI) under the authority of 10 U.S.C. §3204(b)(B) and FAR 6.103-1. The new contract will run from April 1, 2026, through September 30, 2026, to complete thermal remediation services and site restoration for underground storage tanks (BFCUSTs) at the facility. The original competitively awarded contract (SPE603-19-C-5014) was issued September 30, 2019, and was extended to October 31, 2025. The project experienced significant scope growth, increasing from 139,025 to 293,052 cubic yards of treatment volume due to inaccurate initial thermal treatment zone data. The contract value is redacted but identified as a substantial amount reflecting six months of performance.

Justification and Requirements: The J&A establishes that SGI is the sole responsible source capable of satisfying agency requirements due to unique qualifications and specialized geological knowledge of the DFSP San Pedro site, combined with the critical nature of completing a long-term environmental project. SGI has provided remedial services since 2008 and possesses established relationships with local regulatory entities (LARWQCB, AQMD). Key deliverables include Progress Meeting Minutes, Headquarters Briefing Report, Contract Closure Meeting Minutes, Utility Invoicing Summary, Post-Operations Management Report, and Final Interim Remedial Action Plan (IRAP) Completion Report. A public notice was published February 25, 2026, with closure on March 11, 2026; zero capability statements were received, confirming SGI as the only qualified source. Fair and reasonable pricing was determined through comparison to an Independent Government Cost Estimate (IGCE) developed using predecessor contract rates adjusted by 25% inflation factor. The government estimated that awarding to a new contractor would result in substantial cost duplication related to knowledge transfer, regulatory re-establishment, and site restoration work.